Demand for energy fluctuates from peak to trough and back over days and over seasons. Energy demand is typically higher during the day than at night, as electricity is needed to power computers, manufacturing equipment, etc. during the work day. For example, in Asia, energy demand is relatively high during the day and relatively low during the night. Likewise, in North America, energy demand is relatively high during the day and relatively low during the night. However, when it is night-time in Asia, it is daytime in the Western Hemisphere. The energy demand level in North America may be high during the daytime while the energy demand level in Asia is low during the Asian night-time. Energy demand is also typically higher or lower on a yearly cycle based on seasonal patterns of use for heating and cooling or refrigeration, for example.
Existing generating systems are built to accommodate local peak demand. Transmission grids today offer a limited geographic reach, spanning one or two time zones. They follow local demand curves and ramp up and down with the sun. But they must build their generating capacity for peak demand, usually weekday afternoons during summer heat spikes. Power plants that run at full capacity during peak hours or seasons may sit idle during non-peak hours or seasons, and may have to be expensively “ramped up” to full capacity once the peak hours or seasons return. For example, North American power plants sit idle at night, as there is relatively little demand for electricity during that time. At the same time, power plants in Asia may be running at full capacity. Asia would likely import electricity to meet demand if given the opportunity. Building generating capacity to meet peak local demand is expensive for consumers, who have to pay a premium at all hours to obtain electricity during peak demand hours. Building for peak capacity is likewise inefficient for utilities and generators, which suffer depreciation losses and lost profits while plants sit idle during non-peak demand. Still other drawbacks are present in current approaches.